Container docks in Surrey idle after $190m expansion

Container facilities at the Fraser Surrey Docks, which
recently underwent a $190-million expansion, are sitting idle, with
a third of the terminal's workforce laid off.

By The Vancouver SunJune 21, 2006

Container facilities at the Fraser Surrey Docks, which recently underwent a $190-million expansion, are sitting idle, with a third of the terminal's workforce laid off.

The problem arose last fall when its major customer, CP Ships, was bought and the business transferred to other terminals under the authority of the Vancouver Port Authority, which are already reaching capacity.

That cost Fraser Surrey Docks 60 to 70 per cent of its business.

"So it opened up a huge void for us but it also sent a large amount of volume to the inner harbour that was already getting at its upper limit," Bill Wehnert, Fraser Surrey Docks vice-president of sales and marketing said in an interview.

Wehnert said he's been touring the world for business, but he's facing a couple of big hurdles. One is the Fraser River itself, which can only accommodate ships with a relatively shallow draft.

Another is that companies see the congestion at Vancouver's ports and think it's a problem everywhere in the Lower Mainland.

"So we've got three of the terminals quite full and busy and one of the terminals -- ourselves -- available to do quite a bit of business and the world market looks at the Vancouver Gateway and says, 'Oh, they're pretty full up there,'" Wehnert said.

(The Vancouver Port Authority is responsible for Centerm, Vanterm and Deltaport, while the Fraser River Port Authority has jurisdiction over the Fraser Surrey Docks.)

But while the terminals under the jurisdiction of the Vancouver Port Authority are reaching capacity, there is no question of shifting some traffic to Fraser Surrey Docks, said the Vancouver Port Authority's president and CEO Gordon Houston.

The federal legislation that governs the two port authorities forces them to compete with each other, Houston said.

"It's a bit ironic that we've got three terminals in Vancouver that are getting up to capacity ... and one terminal in the Lower Mainland that is suffering from lack of business," Houston said. "[But] we're different entities, we're two different businesses and there's obviously commercial interests at stake here."

"There's been a lot of talk over the years about coordinating the ports," Houston added. "The one thing that is absolutely certain is we need to plan and develop the business much better than we're doing it today.

"The long-term development of the Pacific Gateway depends on the ports. It depends on the roads and the rail infrastructure behind us. So unless the ports are coordinated on how they want to plan the development, it won't be as efficient as it would otherwise."

Over the last two years, Fraser Surrey Docks and the Fraser River Port Authority upgraded the container terminal by buying new cranes, developing a 7.5-hectare intermodal yard and extending the rail holding yard, which increased capacity to 415,000 20-foot equivalent containers called TEUs.

That could easily be increased to 800,000 TEUs, Wehnert said.

As a result of CP Ships changing ports, between 30 and 40 per cent of the workforce at the Fraser Surrey Docks have been laid off, including office staff and unionized longshoremen, Wehnert said.

On Tuesday, The Vancouver Sun reported that shipping companies blamed congestion at Vancouver ports for keeping shipping rates high and preventing companies from following growth programs.

The container business is growing by 10 to 12 per cent a year, so companies have to know there is room for expansion here or they will go elsewhere, Wehnert said.

Last year, Fraser Surrey Docks moved more than 370,000 TEUs, its best year. Mark Erdman, the Fraser River Port Authority's manager of public affairs, said that this year, it will be lucky to move a third of that.

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